MoC to reign in MTR reduction

6 Aug 2010

Israel’s Ministry of Communications (MoC) is reportedly in the final stages of its examination of mobile termination rates (MTRs), with it understood that following pressure from mobile operators, initial cuts will be less than previously proposed. According to Haaretz, with MTRs currently standing at ILS0.25 (USD0.066) per minute the regulator had originally suggested that these would be reduced to ILS0.414 per minute in the first instance before dropping further to ILS0.258 by end-2014; such suggestions echoed recommendations made by NERA Economic Consulting, which the MoC has hired to help advise on reforms in the wireless sector. It is believed that under the revised proposals MTRs would at first by reduced to ILS0.10 per minute by the end of 2010, before falling to ILS0.05 by end-2013.

The decision by the MoC to reduce MTRs comes as part of its efforts to increase competition in the wireless sector. Having unveiled its final regulations governing the introduction of mobile virtual network operators (MVNOs) in November 2009, and having issued its first MVNO licence two months ago, the reduction of MTRs is seen as an important step in ensuring profitability for virtual operators. As previously reported by CommsUpdate, Telecom 365, a subsidiary of the Hamashbir retail group, was named as the recipient of the country’s first MVNO concession in June 2010, since when the regulator has issued a further two licences, to Free Telecom and Ituran Cellular Communication in July 2010. A further five companies are understood to have made applications, including the Israel Postal Company and Bynet Communications.